Assume that the capital account is equal to zero. Net unilateral transfers 150 Exports of goods and services 7500 Net increase in United States government’s nonreserve foreign assists -130 Net increase in foreign ownership of United States based nonreserve assets 550 Net increase in U.S. private assets abroad 1250 Invest income received in the U.S. 510 Net increase in U.S. ownership of official reserve assets 110 Imports of goods and services 6500 Net increase in foreign ownership of U.S.-based reserve assets 100 Investment income paid abroad by the U.S. 800 (a) What is the current account balance? (b) What is the capital account balance? (c) What is the financial account balance? (b) Does the capital account equal the current account? (c) What is the statistical discrepancy? Please show your work 2)Draw a graph of the supply of and demand for the Canadian dollar by the U.S. market. Diagram the effect of each of the following on exchange rates, state in words whether the effect is long, medium,or short run, and explain your reasoning. (f) Big budget deficits in EU and CAD in US. (a) More rapid growth in EU than in the United States. (b) A rise in U.S. interest rates. (c) Goods are more expensive in EUe than in the United States. (d) A recession in the EU. (e) Expectations of a future depreciation in the euro.

Question

Assume that the capital account is equal to zero.  Net unilateral transfers 150  Exports of goods and services 7500  Net increase in United States government’s nonreserve foreign assists -130  Net increase in foreign ownership of United States based nonreserve assets 550  Net increase in U.S. private assets abroad 1250  Invest income received in the U.S. 510  Net increase in U.S. ownership of official reserve assets 110  Imports of goods and services 6500  Net increase in foreign ownership of U.S.-based reserve assets 100  Investment income paid abroad by the U.S. 800  (a) What is the current account balance?  (b) What is the capital account balance?  (c) What is the financial  account balance?  (b) Does the capital account equal the current account?  (c) What is the statistical discrepancy?  Please show your work  2)Draw a graph of the supply of and demand for the Canadian dollar by the U.S. market. Diagram the effect of each of the following on exchange rates, state in words whether the effect is long, medium,or short run, and explain your reasoning.  (f) Big  budget deficits in EU and CAD in US.  (a) More rapid growth in EU  than in the United States.  (b) A rise in U.S. interest rates.  (c) Goods are more expensive in EUe than in the United States.  (d) A recession in the EU.  (e) Expectations of a future depreciation in the euro.